The entry of Revolut into the travel market with its product ‘Stays’ could become a booming success.
Revolut already offers payment-end solutions and currency exchange rates without fees and the addition of the ‘stays’ function marks the next step for the company’s aspiration to become a ‘super app’. Revolut’s Stays will allow travellers to book accommodation ranging from B&Bs to luxury lodges. The app will also allow users to manage their finances and avoid booking fees in the process.
Offering multiple services through one interface forms a streamlined service that rivals other travel industry giants across Europe and the US. The first ‘super app’ offering of this kind in these markets gives it a unique selling point (USP) in the recovery of travel, which could bolster its potential for future success.
Various factors will aid the Revolut ‘Stays’ success
Travel demand is high. GlobalData’s poll found that demand is highest for domestic trips (43%) in 2021. However, travel to a different continent (37%) and the same continent (29%) is also high*. Even though international travel restrictions introduced due to Covid-19 threaten international travel’s recovery in 2021, the domestic market will continue to prosper. Covering all market bases, this is not likely to interfere with Revolut’s popularity.
Revolut already has a large existing customer base. It currently has 16 million global users and was recently valued at $33bn in its last funding round, demonstrating its competitive stance within the marketplace. After booking ‘Stays’, customers will be awarded up to 10% cashback on bookings made through the app. Price and value currently play the largest role in booking hotel/accommodation**. Therefore, any form of saving and ‘value for money’ option will be welcomed by consumers and could make booking through Revolut more attractive.
Throughout the pandemic, consumers have been spending more time online as time at home has increased. GlobalData’s Q2 2021 consumer survey revealed 35% of respondents are more frequently spending time online and 12% have started doing this over the last three months as a result of the Covid-19 pandemic***. This means consumers are more confident in making transactions online and may be more inclined to use a server that holds end-to-end solutions in the booking process, which bodes well for Revolut’s new venture.
Big plans ahead threaten rivals
First launching in the UK on 27 July 2021, plans are in place to eventually roll Stays out across Europe and the US. Accommodation is currently the only service that will be offered but future aspirations are to incorporate flights, car hire and other travel options.
The online travel space is dominated by large industry brands such as Booking Holdings, Expedia Group and TripAdvisor. Booking Holding’s has been planning its ‘connected trip’, a ‘frictionless travel experience’ for end-to-end booking solutions for some time but it has not yet come to fruition. The idea of a ‘super app’, offering multiple services through one interface, has already gained traction in other destinations with Grab in Southeast Asia and Alibaba and Tencent in China. Therefore, Revolut could be the next rival set to threaten the future profitability of leading travel brands across Europe and the US.
*GlobalData’s poll, live since 17 Nov 2020 – 1,442 respondents
**GlobalData’s poll, live since 19 Apr 2021 – 586 respondents
*** GlobalData’s Q2 2021 consumer survey – 22, 338 respondents